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Timing issues for capital allowances computation on plant and equipment.
I have been asked to act on behalf of two clients who run a restaurant. In January 2017 they set up a limited company through which the business was to be run. However it was not until August that they found suitable premises and signed a lease. They then spent several months buying and installing equipment to fit out the kitchen and the dining room. As well as cookers sinks and other culinary equipment they bought tables chairs and crockery. They also paid a premium for the lease and paid rent in 2017. I prepared accounts to 31 December 2017 reflecting this expenditure.
The restaurant opened its doors in January 2018 and is doing reasonably well. The clients have asked when they will receive a tax deduction for the expenditure incurred.
I am now wondering whether I could have extended the accounting period. In fact ...
